Research by Early Strategies and New Angles

Toward Sustainability vs. Digital Transformation – possible match?

Two weeks ago, we presented the research report « How CSR is Changing Business » to an audience of VP/directors of CSR, HR, HSE, Risks and Transformation – from the Financial, Pharmaceutical, Insurance, Services, Manufacturing sectors and more – my apologies for not quoting each of them, we were over 40 in the room.

Jacob Mayne (New Angles) and myself (Cécile Demailly, Early Strategies)*, presented this research, that kept our team busy over 2017 first semester, i.e. some 9 month work in FTE (Amanda Harding, the third researcher of the team, was in the room; our team was punctually complemented by a research engineer). The research report, which we offer to our customers and sell as a strategic thinking and awareness tool, as well as a vehicle to open discussion on ‘difficult’ topics with the executive committee, is extensively presented on its dedicated website.

What I’d like to discuss here is the potential convergence between digital transformation and transformation toward sustainability in corporations. Halfway through the presentation, I described one of the research learning: some 60%, meaning a large majority of the 130 decision makers in large organizations who participated in our research, thought that the impetus for change should come from everywhere and everyone in the organization. Each and every one must acquaint themselves with CSR and sustainable development, include it in their practice, their daily decisions and their plans. Remaining answers pointed to the executive team responsibility, and for a small group to a bottom-up impulse (disruptors?).

To me, this result, these 60% of respondents seeing the “sustainable transformation” as a holistic and ubiquitous responsibility, confirms that collective intelligence has stepped in corporations. It may not be yet in practice, but it is at least an intent and a motivation. Digital transformation allows giving life to collective intelligence thanks to collaboration and non-hierarchical skills and knowledge sharing; because it is another of my expertise areas, I see this as an important and exciting learning.

How can we explain these 60%? They are probably due to the fact that decision-makers have already get their hands dirty with the digital transformation. This specific question on the impetus of change was not specifically tied to the digital transformation, but another was: we asked our participants what they thought about their company maturity in terms of digital transformation and in terms of sustainability. The majority reported that digital was leading – in other words, digital adoption is ahead of social and environmental responsibility adoption. Our research report gives more keys and examples.

We debated about links between ‘digital’ and ‘sustainable’. Here are some of the questions that were asked:

Which domain is leading – digital transformation or transformation toward sustainability? (see above)

What are the budgets, how do they compare?

What could be the leverage, or synergy between the domains?

Are there risks to combine both domains; are there antagonisms?

All interesting topics that might become specific questions in the next issue of the research to be published in 2019.

As for me, I am convinced that a cleverly articulated synergy between ‘digital’ and ‘sustainable’ is not only useful, but is also unavoidable and compelling.

Going digital means improving frameworks, systems and tools: performance and savings objectives are undisputed (even though they sometime make people grind their teeth), yet they are outstandingly down-to-earth, survival oriented, at the bottom of a Maslow Hierarchy of Needs for Business. The corporate vision and mission (which would sit on top of the Maslow Hierarchy) are not nourished by digital transformation. Nowadays, the “Big Hairy Audacious Goal” that James C. Collins and Jerry Porras described in 1994 as the strategic and visionary objective, compelling and making the difference for an organization to become sustainable (cf. their book « Built to Last: Successful Habits of Visionary Companies ») can be sourced in transformation toward sustainability and in corporate social and environmental responsibility. The companies we admire, whether they are multinationals or startups, which GenY and Millennials want to join, that motivate and inspire their teams, are also those that want to change the world, to make it a better world.

The digital transformation will never be an end in itself. In the report published by Early strategy last year, “How Middle Management copes with Digital Transformation”, ‘giving sense’ was an implied topic throughout many answers. Whether decision makers said they support performance growth objectives was connected to their ultimate role in the transformation, in other words to their responsibility to give meaning to the growing volume of information, which also becomes more granular and pinpoint every day. More, the research unveiled two weak signals: that digitization may negatively impact humanness, and that the reporting appetite from some executive teams may be counterproductive, because too narrow, hence not relevant for assessing the organization health.

Sustainable development might be the extra bit of soul the digital transformation needs to succeed. The CDO** and CSO** being allies would make the most of their complementary stances: one has the money and the other has the juice. One comes with the hard, soft and net, the other with the content.

It deserves a try. What do you think?

Would you have any comments, please post them on the LinkedIn edition here, thank you!